Trying To Chew The News Into Small Pieces

The other day I was talking to a friend of mine about the present economical crisis and how I am finding it hard to make any sense of it. Obviously, the situation is dire. It certainly is dire for many of my friends, as well in our own household.

Some friends have thankfully been spared. Not necessarily because they were smarter, but because the companies or institutions they work for or have invested their money in are thankfully (miraculously) solid. Yet, equally, many of the banks and institutions other people invested in (so called no-risk investments) are rapidly dwindling down to nothing.

This has left me with this need to make sense of it all. It is not so much that I want to point fingers at anyone rather I just want to understand what is happening. I am attempting to chew this monstrous disaster down into small pieces that I can swallow.

In this pursuit, I’ve been following a lot of online American news providers. The same news providers I've avidly read these last years while following (almost obsessively) the American election. Whereas the media’s reporting of the election was enthralling, their reporting of the economic crisis is, in my opinion, convoluted, somewhat hysterical, and lacking in insightfulness. Most of what I’m reading leaves my head spinning. Then I listened to this podcast, from This American Life. The podcast titled, Bad Banks, contains the following:

“Alex Blumberg and Adam Davidson tackle a very tough subject: trying to explain exactly what a bank is and does. They talk to a number of experts about what has gone wrong in banking, but not before bringing us all up to speed on some banking basics, like understanding a bank balance sheet, and a bank’s assets and liabilities, and the squishy business of what banks say about their balance sheets compared to what they are.”

It was an enlightening presentation of what banks do and what are they’ve been doing differently the last 20 years to what they used to do 50 years ago. I’ve listened to it twice and find following the material in newspaper articles and interviews now easier to follow.

Listening to the podcast made me ask myself why I’ve been seeking advice from the very source/society that poisoned the well in the first place? And so, I’ve decided to take a radical step and shift my eyes somewhat away from American sources of information to other sources of information.

This got me watching The Guardians panel discussion series, “Capitalism in Crisis”. For instance, John Gray gave an interesting talk about the financial collapse. He says, “There can be no return to the status quo – we will now see geopolitical changes, as well as those to banking and economies.” He speaks about two matters that have been mulling around in my mind, but that I haven’t seen addressed explicitly in the articles I’ve read.

First, he speaks about how the attempt of the various types of capitalism to form a global free market was completely unrealistic. The debt-based financed capitalism of the past twenty years, the one practiced by Americans, is over. Listening to him speak about this, I realised that what often bothers me in the articles I read. It is the fact that the American journalists seem to promote only one form of capitalism, a type of capitalism they haven’t practiced in 20 years, as being the only type of capitalism existing, which is so blatantly untrue. Just as there wasn’t one form of communism.

The second item he addresses is the US dependency on China to continue lending them vast amounts of money. If you listen to American politicians, you’d think that it is the American taxpayer who is shouldering all the costs of the stimulus plan. And, that doesn’t make sense, because they and we are all living in a recession. Mr. Gray calmly points out that China is the one who is shouldering the loan, which makes the whole situation quite precarious don’t you think?

So, even though I will continue to read American news on the occasion, I am going to use it as a spice and not a substance for my daily reading.